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Earnings Beat at Actelion - Analyst Blog

By: Zacks.com
Posted: 2/15/2013 11:10:00 AM
Referenced Stocks: ALIOF;CBM;CYTK;IMMU

Switzerland-based Actelion Ltd. ( ALIOF ) reported fourth quarter 2012 earnings of 47 cents per American Depository Receipt (ADR), up 2.2% from the prior-year earnings of 46 cents per ADR. Earnings were well above the Zacks Consensus Estimate of 28 cents.

For the full year ended Dec 2012, adjusted earnings were $3.69 per ADR compared with $3.04 per ADR in the year-ago period. Earnings were above the Zacks Consensus Estimate of $ 2.24 per ADR.

The prior-year period results included a litigation provision related to the Asahi Kasei lawsuit.

Year 2012 in Details

We note that all growth rates below are in local currency.

Product sales in 2012 were down 2%. Results were hurt because of the negative pricing environment in territories outside the US. On a regional basis, 41% of product revenues came from the US, 37% from Europe, 12% from Japan and 10% from the rest of the world.

Tracleer revenues were down 4% to CHF 1500.2 million in 2012 mainly due to generic competition. Ventavis sales were down 2% from the prior year. Zavesca sales were up 24%.

Veletri, launched in 2010, did very well during the year with sales soaring 53%. In 2012, regulatory approvals of Veletri were received in the US, Switzerland and Canada for improved formulation.

Research & development expenses (R&D) increased 1%. Selling, general and administrative expenses were down 20%.

Pipeline Update

Apart from releasing financial results, Actelion also provided an update on its pipeline. Pipeline candidates, cadazolid for the treatment of clostridium difficile associated diarrhea (CDAD) and ponesimod for the psoriasis indication are expected to move into phase III study in the current year.

In Apr 2012, Actelion reported positive results on Opsumit (macitentan) for the treatment of Pulmonary Arterial Hypertension (PAH), which was filed for review with the US Food and Drug Administration (FDA) and European Medicines Agency (EMA) in the fourth quarter of 2012.

Outlook

Actelion provided its earnings growth guidance for 2013, 2014 and 2015. For 2013, the company expects earnings to remain flat, whereas in the next two years earnings are expected to see single-digit percentage and double-digit percentage growth year over year, respectively.

Our Take

We are pleased with the pipeline progress at Actelion. We expect investor focus to remain on the response from the FDA and EMA for Opsumit. Approval of Opsumit will be a major milestone for the company.

Actelion carries a Zacks Rank #3 (Hold). Currently companies like/such as Cambrex Corporation ( CBM ), Immunomedics Inc. ( IMMU ) and Cytokinetics, Inc. ( CYTK ) look more attractive with a Zacks Rank #1 (Strong Buy).



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